Small Cap Catch Up: TIME, REAT, EMAN And FOXT

5 mins. to read
Small Cap Catch Up: TIME, REAT, EMAN And FOXT

Time Finance (LON:TIME) – Ready To Tick Higher

We now know that the full year results from this independent specialist finance provider will be better than market expectations.

We will have to wait until the Bath-based asset, loan and invoice finance company issues its Trading Update, covering the nine months to end February this year, which is due to be published on Tuesday 26th March.

Analyst Andrew Renton at Cavendish Capital Markets was previously looking for the year to end May 2024 to show total revenues up from £27.8m to £30.8m, upon which he expected to see adjusted pre-tax profits improve from £4.4m to £5.7m, lifting earnings up to 4.6p (3.7p) per share.

For the coming year he was forecasting £33.1m revenues, £6.7m profits and earnings of 5.4p per share.

However, after the 26th I wonder whether he will be upgrading his estimates?

The group’s shares have been up to 44p, that was in late February, since when they have dipped to 36p before picking back up to 39.5p by last night.

These shares are cheap and take little account of the £37m capitalised company’s growth potential in the price.

(Profile 23.12.20 @ 21.5p set a Target Price of 30p*)

(Profile 07.01.22 @ 23.5p set a Target Price of 30p*)

(Profile 20.11.23 @ 32.5p set a target Price of 40p*)

REACT Group (LON:REAT) – Ready To Be Swept Away

In my Profile on this leading specialist cleaning, hygiene, decontamination and contract cleaning business on 12th February I made a concluding comment about the 1,067,648,507 shares in issue.

I clearly stated that –

It would be sensible if moves were made to lose the current ‘penny share’ status, that could give it more investor credibility – which it certainly deserves.”

The shares, which I classed as a bargain for new investors, were then 1.25p, they have since been up to 1.50p, that was before yesterday morning’s announcement which I consider will go a long way to gaining the £15m valued group so much more credence.

The group has now proposed to consolidate its share capital with the aim of improving the marketability of its shares. 

If approved, this measure will give 1 new share for every 50 currently held.

That will see the number in issue reduce following the consolidation to just 21,352,971 shares.

We will look to the AGM on Thursday 28th March and the group’s latest Trading Update for further comment on the current year Outlook.

The shares closed last night at just 1.38p.

(Profile 29.01.21 @ 1.5p set a Target Price of 2.5p*)

(Profile 31.10.22 @ 0.80p set a Target Price of 1.60p)

Everyman Media Group (LON:EMAN) – This Stock Feels So Good

My favourite independent luxury cinema group should be presenting its Final Results for the year to end December 2023 within the next month.

We already know that takings were up some 16.7% to £90.9m, while the company increased its number of venues up to 44 (38) and its screens up to 152 (130) within that year, helping it to improve its market share to 4.8% (4.5%).

Analyst Mark Photiades at Canaccord Genuity Capital Markets, who rates the group’s shares as a Buy and is looking for 200p a share in due course, has estimates for the current year to show £108.0m revenues, with its adjusted pre-tax loss dropping to only £0.8m from an estimated £2.9m down last year.

Photiades, who sees the group breaking into profits next year, is impressed by the company’s strong balance sheet and its growth positioning.

Don’t forget that while Canaccord Genuity’s discretionary clients have been substantially slicing their holding in the group’s shares, from 9.99% to just 2.67% at the end of January, Non-Executive Director Michael Rosehill, on behalf of Blue Coast Private Equity has been increasing his stake to 25.08m shares, representing 28.3% of the group’s equity.

I continue to reckon that this group’s shares are cheap and that they are sure to climb a lot higher over the next few months or so.

They closed last night at a very steady 59p after having touched 68p less than a month ago.

My Target Price confidently holds very firm.

(Profile 23.08.23 @ 59p set a Target Price of 73.5p)

Foxtons Group (LON:FOXT) – A Strong Property Holding

Considering the general state of the residential property market over the last year or so London’s leading estate agency group gave out a very interesting set of full year figures on Tuesday of this week.

Revenues for the year to end December 2023 were £147.1m (£140.3m), while adjusted pre-tax profits were £13.8m (£13.1m), generating 2.8p (3.0p) in earnings but maintaining its 0.90p per share dividend.

CEO Guy Gittins stated that:

“2023 was a year in which Foxtons has been fundamentally transformed. We have achieved a lot in a short space of time by making improvements across the business and Foxtons is now in much better shape than the company I inherited 18 months ago.  

We have restored Foxtons’ competitive advantages by investing in core capabilities, growing fee earners and reinvigorating our culture and this has been achieved ahead of schedule. As a result, Foxtons was the UK’s fastest growing large lettings and sales agency brand in the UK in 2023 and reclaimed its position as London’s leading estate agency.

Most importantly, we have rebuilt and strengthened the Foxtons Operating Platform. The platform is a unique, industry-leading and proprietary asset which will underpin our future growth and, due to its scalability, will provide Foxtons with the capability to expand and consolidate across our industry.

Our strategy to deliver growth through sales market cycles by delivering Lettings growth is working, delivering resilient earnings for the year despite a weak sales market and the investment we made in fee earners. We are on track against our medium-term target of delivering £25m to £30m of adjusted operating profit, through organic and acquisitive growth and supported by improving market conditions.”

Analyst Greg Poulton at Singer Capital Markets rates the group’s shares as a Buy with an upgraded Price Objective of 88p (63p) per share.

For the current year his estimates are for £158.3m revenues, profits of £17.0m, earnings of 4.0p and paying a 1.10p dividend per share.

With a portfolio of over 28,000 tenancies and growing in number, the £180m capitalised group has set itself a medium-term target of achieving a £25m to £30m adjusted operating profit.

The group’s shares, which have performed well since 2nd January when they were trading at 46p, closed last night at 59p.

Hold very tightly, we are only days away from my 2024 Target Price of 61p being achieved, while my 2021 aim of 76p will take just a little longer to be scored.

(Profile 07.07.21 @ 60p set a Target Price of 76p)

(Profile 08.01.24 @ 49.25p set a Target Price of 61p)

(Asterisks * denote that Target Prices have been achieved since Profile publication)

I hope that you are attending The Master Investor Show 2024 this coming Saturday at the Business Design Centre in Islington.

If you are then I would be delighted to meet you and have a chat about the Small Cap sector – please don’t hesitate to do so, it would be good to get your feedback.

Comments (1)

  • Tolle says:

    Like time. The own book loans compound the growth with excellent forward visibility. Only last year they opened a new vertical which is starting to kick in to the figures. Software systems upgrade to align the sales for cross selling. Trajectory looks very fine.

    Foxtons. You were punting this lot in 2021, and you stated that under new management it was up up and away. Three years later still nowhere near your target, despite rentals flying over that period. Look at belvoir up over 50 per cent excluding copious dividends. Awful recommendation imo

    Ps they also closed their London branch in my area. Not inspiring at all

    And Aston Martin, lumbered with huge debts, and bad results. You recommend, IC have it as a sell. Unusual for me to agree with investors chronicle. Nice cars, awful investment case.

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